April 26, 2009 in Business

Housing bargains abound in devastated Florida market

Philadelphia Inquirer
 
McClatchy Tribune photo

McClatchy Tribune
(Full-size photo)

Welcome to Florida: sun, surf, and loads of property at fire-sale prices.

Want a house that looks like a million but costs thousands less? Florida has ’em. A duplex for less than $100,000? The Sunshine State has those, too.

And the plummeting prices are luring buyers from other states to communities along the Atlantic and Gulf Coasts in search of primary homes, vacation homes, retirement homes, name it.

Median prices have tumbled in Florida – almost 30 percent year over year in Miami and Cape Coral-Fort Myers, and almost 25 percent in Fort Lauderdale and Orlando, according to recent measurements by First American CoreLogic, which tracks values nationally.

Last week, in Palm Beach County alone, Foreclosure.com had postings for 15,120 foreclosed houses, 10,545 in preforeclosure, 107 sheriff sales, and 820 houses involved in bankruptcies.

For Raymond Sterling, a Linwood, N.J., endodontist, and his wife, designer Beth Markward, the winter retreat they just bought in a 12-year-old building overlooking the Delray Beach yacht club was a bargain at about $700,000.

“My bet is that I paid at least 40 percent off what the price would have been six months ago,” Sterling said. (Another unit at the 12-unit Residences at Delray Beach Yacht Club is listed at $1.05 million, but recent sales history suggests it will go for much less.)

The couple, in their 50s, took care to stay away from new high-rises, which tend to be empty and foreclosure-plagued. The fewer the owners, the higher the condo fees.

They are selling condo on Philadelphia’s Society Hill that they bought in the $1 million range in 2004. It has been on the market for just a couple of weeks at $995,000, but there is already a full-price offer. And when they are not at Delray Beach, they will stay at their place in Margate, two blocks from the ocean.

“I like the water,” Sterling said. “At the Shore, the closer to the beach or the bay, the better. In Florida, the best places to buy are right on the ocean or along the Inland Waterway.”

Looking to spend quite a bit less than $1 million for a Florida address?

Mark and Susan Schultz found a duplex in Lehigh Acres, about 10 miles east of Fort Myers, for $90,000 – because of a foreclosure, more than one-third less than the original price of $320,000. But it wasn’t a vacation or retirement home they were after.

“We wanted to buy investment property with positive cash flow in Pennsylvania, but we couldn’t find anything, so we looked at Florida,” said Mark Schultz, 59, a Philadelphia lawyer. “They were asking $100,000 for the duplex; we countered with $90,000, and it was accepted. We then found tenants for each unit, each paying $750 a month.”

A lot of what’s for sale in Florida is in sad shape, not unlike the condition of housing in other such high-foreclosure areas as the Southwest and California. The development in which the Schultzes bought – filled with newly built homes, most put up in just the last couple of years – is no exception.

“It is very common for homes to be stripped of their appliances and fixtures by prior owners before they move,” said Michael Schultz, an agent with Porter Davis Real Estate in Fort Myers and the Schultzes’ son.

That said, he added, “there are more transactions happening per month now than during the boom. Sometimes, you show up at a house and have to wait for a couple of groups to get through the home before you can get inside.”

With Florida’s jobless rate at 9.4 percent and foreclosure numbers fourth-highest in the nation, buyers these days tend to be out-of-staters. Many are getting a leg up on retirement.

About 10 years ago, William Dunkelberg paid $100,000 for a lot with 30 feet of waterfront in Cape Coral, in anticipation of doing just that. When he was ready to build, though, he couldn’t find anyone to take the job.

That stopped being a problem in the last year or so, and now the Temple University economics professor spends the requisite 180 days a year at his new Florida house and out of Pennsylvania to avoid paying the state’s income tax. (Florida has none.)

“I’m going to half-time teaching. Then, in three years, I’m done, and it’s wine and margaritas by our vanishing-edge pool,” Dunkelberg said.

“Today, you can buy a building lot anywhere in the Cape Coral area for $5,000 to $10,000, some with spectacular views of the canals that are carved throughout the community’s 100 square miles,” he said. “There are so many vacant lots throughout the area – the city charges $40 per lot per year to keep them mowed.”

In nearby Fort Myers, Michael Schultz has a building lot listed at $7,200. Its price in 2007: $160,000.

Boca Raton has been a mecca for Philadelphians since 1928, when Philadelphia Suburban Water Co. president Clarence H. Geist bought what is now the Boca Raton Resort & Club after its builders went belly-up.

Eighty-one years later, there are plenty of short sales (in which the lender accepts less than the remainder of the mortgage) and foreclosures from which to choose.

Yet, taking a risk on a distressed property does not interest Benjamin and Janice Kevitch, of Bala Cynwyd. They rented in Boca while looking for a condo for their retirement.

“We’ve made offers on units in a couple of buildings, and we’re waiting to hear back,” Benjamin Kevitch said. “They are really good buildings with good associations, and no empty units.” If the offers aren’t accepted, they’ll continue to “patiently look.”

“I like the area, I like the ocean and play a lot of tennis, so this is a good place for me,” said Kevitch, 75. “The prices here today are pretty reasonable, too.”


There is one comment on this story. Click here to view comment >>

Get stories like this in a free daily email